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DAILY MARKET REPORT

EURUSD plunged to a new 2-month low of 1.0715 after the release of disappointing German GDP data. The data showed Europe’s largest economy, Germany enters recession after GDP falls for the second successive quarter.

DAILY MARKET REPORT

EURUSD plunged to a new 2-month low of 1.0715 after the release of disappointing German GDP data. The data showed Europe’s largest economy, Germany enters recession after GDP falls for the second successive quarter. The GDP contracted by 0.3% during the first quarter of 2023. This comes after Germany recorded a 0.5% contraction in the last quarter of 2022. Meantime, Germany's GfK Consumer Climate improved a bit but remains deeply negative.

For the euro there is no major economic data scheduled rest of this week, so again the trend of the euro would largely depend on the trend of the dollar index. Technically, the overall momentum remained bearish throughout the European session. In the short term, 1.0700 is the immediate support level, followed by 1.0680/70. On the flip side, 1.0760 now seems to act as an immediate resistance, which, if cleared, might trigger a short-covering bounce. In the long term, watch for weekly closing above 1.0900 or below the 1.0700 area, which will give a larger confirmation of direction in the long term.

EQUITIES

US stock futures struggling to regain upside momentum despite the release of less hawkish FED minutes as investors remain concerned over the delay in resolving US debt-ceiling issues. However, investors and market participants kept a close eye on a slew of upcoming U.S. economic data that could influence the next Federal Reserve monetary policy meeting outcome.

OIL

Crude oil futures slightly retreated from the weekly highs as the ongoing US debt ceiling issue continued to weigh on global markets. On the positive side, the latest EIA crude inventory data showed the US crude inventories declined by 12.456 million barrels last week, the largest drop in six months and defying expectations of a 0.775 million increase.

CURRENCIES

In the currency market, the US dollar index hit a fresh 2- month high following the hawkish remarks from Fed Governor Waller. Waller said that whether to raise interest rates again next month or not will depend on key data in the next few weeks, but it is too early to declare the end of the tightening cycle. On the other hand, the British pound slightly recovered from the early losses against the US dollar after the latest UK inflation report led the rates market to anticipate an additional interest rate hike by the Bank of England in the coming months.

GOLD

Bears take control of precious metals, especially the gold price. However, the bears need to see a confirmed break below the crucial support area of $1950/48 for further downside. Moving ahead to the North American session, gold traders should closely monitor the release of US GDP data, the Prelim GDP for Q1 which is expected to remain unchanged at 1.1%.

Economic Outlook

On the data front, the Federal Reserve released the minutes of its May meeting on Wednesday. The minutes showed the Fed officials were less confident about the need for more rate hikes. All officials said they wanted to see all the economic data due before the June meeting, so the uncertainty may last until the Fed actually meets again on June 13-14.              

Moving ahead today, the important events to watch:

US – GDP: GMT – 12:30

US – Jobless claims: GMT – 12.30

Technical Outlook and Review

EURUSD: For today, the immediate support for the Euro stands near the level of 1.0700. On the flip side, the first resistance is at 1.0760, any break above this level will open at 1.0800/10 minimum.

eurusd

The important levels to watch for today: Support- 1.0710 and 1.0680 Resistance- 1.0760 and 1.0800.

GOLD: For gold, the first nearest support level is located near 1953 then 1948. In case it breaks below 1948, it will head towards the next support level which is located near 1940. On the upper side, 1966 will act as an immediate and strong hurdle while 1975 will be a critical resistance zone.

gold neww

The important levels to watch for today: Support- 1948 and 1940 Resistance- 1966 and 1975.

Quote of the day “I don’t want to spend my time trying to earn a lot of little profits. I want very, very big profits that I’m ready to wait for.” Philip Fisher.

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